The government is understood to be looking at introducing top-up fees, charging students and their families more for a university education.

An expert on higher education systems, Professor Oliver Fulton of Lancaster University, gives his analysis of the possible ways forward for British universities.

You could say British universities are at a crossroads.

One choice is to move back towards a European system where the state pays the cost of higher education and determines what it looks like.

The other choice is the American system, which is more market-like.

In mainland Europe traditionally the state guaranteed that who ever qualified for it would get a place in higher education.

In most countries it is not just a place.

In Norway there is such a strong commitment to the democratic importance of higher education that no student pays fees of any kind, including overseas students.

The main point about allowing everybody to go to university is not charging tuition fees

Sven, Germany

In Germany, it has always been understood that all universities are equal, so it doesn't matter which one you go to.

There is no equivalent in Germany of Oxford, Cambridge or Imperial College, London - the kind of institutions which are thinking of charging top-up fees.

Sven, who is 23, is studying at Lancaster University.

"In Germany, because of a very social democratic background that being equal in society is very important, the main point about allowing everybody to go to university is not charging tuition fees," he said.

"In that way, everyone who can study and wants to study can do it, that makes everybody equal."

US experience

The United States has a mix of public and private universities and some of those are certainly wonderful institutions.

But there are two problems. The first is that the US government and the federal governments both give huge contributions to universities.

The tax payer in the US certainly isn't saving compared with the amount of money we give to higher education in this country.

The second problem is one of access.

Harvard operates a system it calls "needs blind" - you can apply to Harvard and however much money you have got, they guarantee you will be able to afford to go there.

A lot of people don't go because they can't afford it

Rachel Klausner, US student

Lower down the system, a lot of people do make choices which depend on finance.

People apply to their local community college and go part time rather than applying to a state university for a full-time residential course which might suit them better but which they think they can't afford.

Rachel Klausner is an American student from Rutgers University in New Jersey, who is studying drama and communications at Manchester University.

"l go to a state school which has a lot of state funding," she said.

"As an in-state resident I am still paying about $9,000 a year in tuition plus housing.

"State schools are supposed to be for everyone but they are not. A lot of people don't go because they can't afford it.

"In England people go to university a lot more because they want to, because they are academic and are interested

"In the US people go because their parents make them and because all 400 people from their graduation class in high school went and they don't want to look stupid.

"You go because you need that bachelor's degree to get a decent salary. You can't get a job without a degree."

Australia

The danger for us if we move towards America is that we might end up more like Australia. Australia is a bit ahead of us in moving towards a US-style market.

But there the Australian government has been reluctant to make a big enough contribution to keep all its universities on the road and allow them to charge reasonable fees.

There have been huge pressure to recruit massive numbers of overseas students and they have gone in for rather desperate searches for profits at all costs.

It's not clear to me that the best Australian universities are any better than they were or for that matter, more efficient.

There are two choices.

We could reinforce the European commitment - we could say that what really matters is equal opportunities for as many people as possible so that we provide something that is good enough for everyone and is affordable to as many people as possible.

The other choice is the US version - where what really matters is individual choice even if that leads to quite a lot of inequality. It will lead to excellence for some and that is better than something good for everyone.

Professor Fulton first presented this feature on BBC Radio 4's You and Yours programme.